Cobb EMC faces another Lawsuit
By Gertha Coffee & Margaret Newkirk
Atlanta Journal Consitution
January 15, 2010
Cobb EMC faces another lawsuit, this one claiming it owes thousands of
former customers up to $300 million. The lawsuit seeks class-action
status for all former customers since 1939.
The lawsuit, filed Friday in Cobb County Superior Court, claims that Cobb EMC, one of Georgia’s largest
electric cooperatives, has kept money owed to former customers in
violation of "longstanding principles" that guide electric membership
cooperatives nationwide.
It also says the co-op used money that should go to former customers
to make periodic rebates to current customers. The company's Web site
says the coop has paid $33 million in rebates since 1996.
The lawsuit, filed by Alpharetta law firm Pierce, Gabriel &
Parker, also claims Cobb EMC has failed to abide by the terms of its
own charter, which calls for repaying current and former customers from
its excess earnings. The excess is credited to members based on power
usage.
"Cobb EMC has kept these capital credits and not returned any," said
attorney Chuck Gabriel. But unlike current customers, former EMC
customers can only seek repayment through the courts, said attorney Sam Pierce. . . .
The co-op settled a lawsuit with suing customers in December 2008, related to a for-profit affiliate, Cobb Energy.
In April last year, the Cobb County district attorney's office executed search warrants at five locations related to Cobb EMC.
Settlement of lawsuit against Cobb EMC is approved
Atlanta Journal-Constitution
Tuesday, December 2, 2008
A 14-month legal war between Marietta electric cooperative Cobb EMC
and its customers ended Tuesday, when a judge approved a settlement of
the case.
The co-op will spend an estimated $47 million to regain control of
the business it turned over to a for-profit affiliate, Cobb Energy, 10
years ago.
Co-op's chief rewarded with Cobb Energy Stock
Atlanta Journal-Constitution
May 1, 2008
A nonprofit Cobb County electric cooperative and its management company awarded their chief
executive $3 million in stock that pays $265,500 a year in dividends,
according to annual reports and court disclosures.
Dwight Brown obtained 120,000 shares in the management company, Cobb
Energy, in 2002 with interest-free loans that he does not have to repay
if he meets certain conditions.
Brown's dual role as
president of both entities is at the heart of a 2007 lawsuit alleging
he enriched himself at the customer-owned utility's expense. The co-op,
Cobb EMC, once owned all of Cobb Energy, but later transactions shifted
most ownership to investors, including Brown.
Judge to Cobb EMC:
Open up
Co-op has up to 60 days to develop way for 190,000 members to vote
for board; judge also wants for-profit’s information made public.
Atlanta Journal-Constitution
Tuesday, August 26, 2008
Cobb EMC must make the election of its board of directors more democratic, a Cobb County judge ruled Monday.
Superior Court Judge J. Stephen Schuster also signaled that he wants
greater transparency from both the electric co-op and its management
firm, including disclosure of profit-and-loss statements and the names
of stockholders.
Schuster gave the co-op up to 60 days to develop a procedure
allowing the co-op’s 190,000 members to vote for new directors
electronically, or by written proxy delivered in their monthly electric
bill. . . .Schuster said. . .
“Democracy is not a bad thing.” . . .
If the ruling stands, the co-op would have to drastically revise the
way in which it has elected directors over the past 60 years. In the
past, fewer than 1,000 members have attended the annual meetings at
which directors were chosen.
Last year, co-op leaders directed employees to attend without
wearing clothing or badges that would indicate they worked for the
co-op, said Pitts Carr, an attorney representing co-op. . . .